Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $2.1M (vs $3.3M modeled).
EBITDA Bridge — 7 RCM Levers
Each bar shows the annual EBITDA impact at full run-rate. Revenue levers increase top-line; cost levers reduce operating expense; cash acceleration releases working capital. Calibrated to published research bands (Denial 12%→5% = $8-15M on $400M NPR).
Lever Detail
Each value shows its data source. SELLER = seller data room, DEFAULT = model default, BENCHMARK = P75 peer benchmark.
| Lever | Current | Target | Revenue | Cost | EBITDA | WC | Ramp |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $1.2M | $1.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.2M | $34K | $1.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $191K | $566K | $757K | $2.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $40K | $40K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 58.1% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
| CDI / Case Mix Index | 135.0% DEFAULT | 142.0% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
Implementation Timing Curve
Linear ramp to full run-rate per lever. Month 0 = close date. Partners should expect 60-70% of total uplift realized by month 12.
| Lever | M0 | M3 | M6 | M9 | M12 | M18 | M24 | M36 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $311K | $622K | $934K | $1.2M | $1.2M | $1.2M | $1.2M |
| Denial Rate Reduction | $0 | $308K | $616K | $924K | $1.2M | $1.2M | $1.2M | $1.2M |
| A/R Days Reduction | $0 | $252K | $505K | $757K | $757K | $757K | $757K | $757K |
| Clean Claim Rate | $0 | $20K | $40K | $40K | $40K | $40K | $40K | $40K |
| Cumulative | $0 | $892K | $1.8M | $2.7M | $3.3M | $3.3M | $3.3M | $3.3M |
Returns Sensitivity (IRR / MOIC)
5-year hold, 5.5x leverage, 3% organic growth, 10%/yr debt paydown. Green = exceeds 20% IRR hurdle. Amber = 15-20%. Red = below hurdle or loss. RCM uplift of $3.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 109% / 39.7x | 114% / 44.5x | 118% / 49.2x | 120% / 51.6x | 122% / 54.0x |
| 9.0x | 104% / 34.9x | 108% / 39.2x | 113% / 43.4x | 115% / 45.5x | 117% / 47.7x |
| 10.0x | 99% / 31.1x | 104% / 34.9x | 108% / 38.8x | 110% / 40.7x | 112% / 42.6x |
| 11.0x | 95% / 28.0x | 99% / 31.5x | 104% / 34.9x | 106% / 36.7x | 107% / 38.4x |
| 12.0x | 91% / 25.4x | 96% / 28.6x | 100% / 31.8x | 102% / 33.3x | 104% / 34.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 77% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.5x, adding 7.0 turns of cushion.
5-Year Value Creation Waterfall
EBITDA trajectory: 3% organic growth + RCM uplift ramp (full run-rate at month 18).
| Base EBITDA | RCM Uplift | Total | Margin | |
|---|---|---|---|---|
| Entry | $695K | — | $695K | 1.1% |
| Year 1 | $715K | +$2.2M | $2.9M | 4.7% |
| Year 2 | $737K | +$3.3M | $4.0M | 6.4% |
| Year 3 | $759K | +$3.3M | $4.0M | 6.5% |
| Year 4 | $782K | +$3.3M | $4.1M | 6.5% |
| Year 5 | $805K | +$3.3M | $4.1M | 6.6% |
Achievement Sensitivity
What if we only achieve a fraction of each lever? 50% = conservative, 75% = base management case, 100% = plan, 120% = stretch.
| Lever | 50% | 75% | 100% | 120% |
|---|---|---|---|---|
| Cost to Collect | $622K | $934K | $1.2M | $1.5M |
| Denial Rate Reductio | $616K | $924K | $1.2M | $1.5M |
| A/R Days Reduction | $379K | $568K | $757K | $909K |
| Clean Claim Rate | $20K | $30K | $40K | $48K |
| Total | $1.6M | $2.5M | $3.3M | $3.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 45 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.1% | -9.4% | 1.2% | 9.3% | P48 |
| Net-to-Gross | 60.1% | 39.6% | 45.7% | 58.1% | P84 |
| Occupancy | 19.7% | 12.0% | 24.7% | 41.3% | P39 |
| Rev/Bed | $4.1M | $909K | $1.7M | $2.4M | P91 |
| Exp/Bed | $4.1M | $873K | $1.6M | $2.4M | P96 |
Bridge Methodology
Coefficients calibrated to published research bands: denial 12%→5% = $8-15M on $400M NPR. Current metrics estimated from HCRIS public data and ML predictions. Target metrics set at P75 peer benchmarks with 60% gap closure assumption. Revenue levers use NPR × delta × avoidable share. Cost levers use claims volume × cost per reworked claim. Working capital from AR reduction is one-time cash (not included in recurring EBITDA). Returns assume 5.5x leverage, 3% organic growth, 10%/yr debt paydown.